Beware the hobby that eats. ~ Ben Franklin
How much and what kinds of food should we produce? Because food is a necessity, these questions have occupied policy-makers for a long, long time. Food policy, one of the most contentious political issues both within nations and across countries, varies significantly around the globe.
For all too long, US food policy has been focused on benefiting a selective, few food producers (Big Food - industrial-sized farmers and processors) and mostly ignoring food eaters (all of us).
As I've mentioned in an earlier post, the US is blessed with abundant, fruitful land on which to grow crops and raise livestock. The US ranks first among nations in the amount of land cultivated for agriculture. Equally important, US farmers have continued to innovate and utilize agricultural (ag) techniques and technologies that have steadily increased farm productivity. In the last 40 years, US ag productivity (measured by the number of people a single American farmer grows food for) has increased a remarkable 774%. Recently, however, these impressive gains seem to be subsiding. As ag productivity has risen, the number of farmers has significantly dropped, so now less than 1% of our population claims "farming" as their occupation. The remaining, larger farmers have been financially benefiting from soaring farmland prices and increasing demand for their products. Since 2009, farmland prices in Iowa and Nebraska have doubled.
Commodity ag production is dominated by an even smaller number of large, industrial-scale farm operations in the US. As the world's largest exporter of food products, the US sold $135.8 billion (B) worth of food and food products abroad in 2012. According to the UN's Food and Agriculture Organization (FAO), the US is ranked number one in the export of corn, soybeans and wheat – among primary ag commodities – along with almonds, blueberries, peanut butter, spinach and other crops. The vast bulk of these exports center around primary food commodities.
Because of our productive farms and skilled farmers, as well as deliberate food policies enacted by the Federal government, US consumers spend , by a wide margin, the lowest proportion of their income on food of any nation, as shown in Figure 1. This certainly benefits food consumers, which includes everyone of us. But this inexpensive food comes with several economic and physical consequences.
First, because the domestic food industry has fiercely and successfully protected its interests, the US like virtually all countries has provided sizable subsidies to commodity farmers (up to $35B annually) and erected significant barriers to the import of certain foods and food products from foreign countries. Who pays for these subsidies and supports? Taxpayers. Protecting a nation's food supply is arguably a high priority in terms of survival. The strategic rationale for using tariffs on ag products is long-standing in terms of "food security." Over 210 separate ag product tariffs – including one for furskins – are in force in the US. These tariffs increase the price of food. But large US commodity farmers are hardly feeble, fragile producers needing protection from superior foreigners.
Second, because of these substantial subsidies, ag products like corn, wheat and soybeans have remained relatively inexpensive. How have food producers responded? By substituting these products and their derivatives into more and more retail foodstuffs. Most soybean production is destined for food meal eaten with grain by livestock. More and more inexpensive corn has been transformed into high-fructose corn syrup destined for sugared-soda, breakfast cereal, ketchup and a myriad of other retail food products.
According to World Bank data, the US price of corn has decreased almost 9% during the past 6 months. These subsidies have well-noted and demonstrable physical consequences for the food-eating public; just ask New York City Mayor Michael Bloomberg. The increased use of subsidized ag commodities in our food contributes to higher obesity levels both for adults and children. More than one-third of US adults (35.7%) are obese, not just overweight. Obesity prevalence among children and adolescents has almost tripled since 1980. Now about 17% (or 12.5 million) of children and adolescents aged 2 -19 years are obese.
Third, the disproportionate influence of large, primary food producers not only greatly sways domestic food policy in their favor, but has scuttled the last set of international trade talks, the Doha Development Round, within the World Trade Organization. Several countries, vigorously supported by domestic food producers, would not agree on reducing often sizable tariffs on food imports. Who is hurt by these import protections? Chiefly hundreds of millions of food consumers, as well as domestic and foreign food producers, especially in developing nations.
Here are three examples of disruptive food-based tariffs. First, US tariffs on sugar, championed by domestic sugar producers, have significantly increased the price of sugar in the US. According to the Dept of Commerce, the domestic price of US wholesale refined sugar over the last 25 years has been two to three times the world price. These higher prices are maintained through support loans and tariff-rate quotas. In 2004, the US price was 23.5 cents per pound, compared to the world price at 10.9 cents. This price differential results in a significant competitive cost disadvantage for domestic sugar-containing product manufacturers, and higher prices for US consumers. Employment in domestic sugar-containing products industries decreased by more than 10,000 jobs between 1997 and 2002 according to the Bureau of Labor Statistics.
Second, like many countries Japan has venerable tariffs on food imports to protect its seemingly less efficient domestic producers. Japan applies an average tariff of 25% on agricultural produce imports, about 4 times as high as Japanese non-ag tariffs. This doesn't include rice imports (a key staple of Japanese diet),which are protected by a 778% tariff! While this astonishingly high tariff protects the usually small-scale Japanese rice farmers, it hurts all Japanese rice consumers, as well as more efficient rice exporters from Thailand, Vietnam (the world's top two rice exporters) and other nations.
Last and by no means least, the European Union's Common Agricultural Policy (CAP) is unfortunately typical of how ag tariffs protect relatively small numbers of farmers/producers to the detriment of all food consumers. The CAP's budget in 2012 was $71.5 billion (B), and represents 42 %of the total EU budget, making it the largest agricultural "aid" program in the world. The CAP offers income and market support for farmers, as well as "rural development support" that helps farmers modernize their farms and become more competitive while protecting the environment, and keep rural communities "thriving." It's interesting to note that Europe has over 17 million (M) farmers (out of a population of over 500M) with an average farm size of about 30 acres.
By comparison, the US has about 2 million farmers, and an average farm size of 445 acres. Thus, there are over 5 times as many farmers per capita in the EU, and their farms are on average 15 times smaller than those in the US. It's hard to imagine that many of these EU farms are as proficient as those in the US. A group of Purdue University agricultural economists offered the following statement in 2002 regarding the size of a farm needed for efficient production: An economically viable crop operation in the US Corn Belt (includes Illinois, Iowa, Missouri, Nebraska, Kansas and Minnesota) would have between 2,000 and 3,000 acres of row crops. That's a lot different than a 30 acre Polish farm. As is the case for all too many ag assistance programs, the CAP appears to support an ever-shrinking culture, associated with "rural " communities, that's been overcome by the march of time and progress.
The significance of a small number of large US ag producers has steadily increased over time as techniques and technology have allowed for more efficient, mechanized industrial-scale production. A mere 46,000 farms in the US (2.5% of all farms) accounted for 50% of all sales of agricultural products in 1997. This trend in ever-more concentrated power of Big Food has had major consequences for all food consumers and producers around the globe. As mentioned above, this power extends to other nations' farmers, in particular those in the EU.
What can eaters do? We can vote with our mouths by continuing to buy food products that are healthful and nutritious (H&N), rather than laden with sugar, salt, fat and non-natural ingredients. This is easier said than done since H&N foods are often more expensive than subsidized foods. And, buying H&N foods runs counter to Big Food's enormous marketing and sales efforts of that inundate each and every one of us all the time.
Federal food policy needs to change by stop subsidizing Big Food and instead support H&N food producers and eaters. Improving the viability of smaller, organic producers would be a good place to start. It would be reassuring if writing our Congress-person to indicate our serious support for H&N foods would have some positive effect towards making eaters in the US (and beyond) more relevant and healthier. It's certainly worth a try. But our beloved Congress is guided by focused and forceful minorities (like industrial Big Food reps who has now gotten "ag-gag" laws passed in several states) rather than far more numerous but restrained majorities (like food consumers, who don't have lobbyists to press their case). So it may be simplistic to rely on consumer "votes" to re-orient food policy in this land of Big Macs, Big Gulps, Pringles and Snickers, but one has to start somewhere…
